A few weeks ago, I was in Miami for a long weekend. It was fun soaking up Florida’s sandy beaches and sunshine (and humidity). Sadly, the good times soured quickly at the airport that Sunday night.
After three hours of delaying the flight, the airline simply canceled it without warning. By then it was fairly late in the evening, and dozens of passengers were left stranded – and very unhappy.
Significant confusion ensued, and the airline staff seemed wholly unprepared to handle the situation. Eventually, passengers were told that if they got a hotel, they’d get reimbursed.
A month later, that reimbursement still hasn’t come, and I’m not sure it will.
Anyone who’s suffered this plight understands how frustrating it is – and how helpless it makes you feel.
Biden to the rescue
President Joe Biden wants to help. Last week, he and Transportation Secretary Pete Buttigieg announced that they are working on new regulations to force airlines to do “right” by their customers and compensate them for long delays and cancellations.
As Biden said: “We’re planning to make it mandatory for airlines to compensate travelers with meals, hotels, taxis, and cash, miles, or travel vouchers when your flight is delayed or cancelled because of their mistake. That’s peace of mind.”
Sounds like Biden is watching out for us, right?
In reality, it cost us all more money. That’s the case with burdensome government regulations, despite how well-meaning they may sound.
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Currently, airlines are required to refund customers only the price of their ticket, when cancellations are due to airline error (not weather or other things outside their control).
These mandates would be much more intrusive on the industry, and airlines wouldn’t just eat those costs – they’ll raise prices for us in response.
“It’s very clear that the airlines will pass the costs on to consumers because that’s what every business does in the face of the increased cost of regulation because not to do so would mean saying, well, we’re going to accept less by way of profit and that’s not something that our shareholders are going to be very happy about,” says Samuel Gregg, distinguished fellow in political economy at the American Institute for Economic Research.
And if ticket prices rise higher than they already are, that will hurt middle- and lower-income customers the most, even though they are the ones Biden says he’s trying to help with these regulations.
In addition, regulations like these aren’t effective in reducing preventable delays and cancellations. Gregg says European airlines are heavily regulated but still struggle with reliability.
Let the free market work
Biden and Buttigieg earlier this year sent airlines a warning that they should also scrap any fees for ensuring families are seated together, and they want to turn that into a requirement.
Again, that sounds nice, but those costs would be spread to all customers.
In discussing the proposed regulations, the Biden administration has inadvertently admitted they aren’t even necessary.
In recent years, airlines have started waiving fees for all kinds of things, from flight change fees to fees for family seating. And many airlines already promise to reimburse customers for hotels and food when delays or cancellations are their fault.
They’re doing this because they realize it’s the best way to attract new business – and keep customers happy. And it leads to more competition among airlines, which is good for passengers.
The Transportation Department has a new dashboard that clearly shows current policies among major airlines for delays and cancellations, as well as family seating. That’s fine, as it gives customers an easy place to see what they can expect without reading all the fine print.
Turning encouragement into a mandate, however, will make flying more costly and keep more Americans grounded.
Ingrid Jacques is a columnist at USA TODAY. Contact her at ijacques@usatoday.com or on Twitter: @Ingrid_Jacques
